Mobile Device Apps - UK - October 2016

OVERVIEW
What you need to know
Covered in this Report
EXECUTIVE SUMMARY
Market maturity slows revenue growth
Figure 1: Value of mobile device apps sales and in-app purchases from the iOS App Store and the Google Play Store in the UK, 2012-16 (est.)
iOS dominates worldwide revenues despite Google Play’s higher downloads
Figure 2: App store revenue split for iOS App Store and Google Play Store, by country, July 2016
Device-specific dynamics impact platforms’ reach
Figure 3: Operating system on any mobile devices owned (either smartphone or tablet), July 2016
Figure 4: Operating system, by device, July 2016
Social media and messaging apps are the most popular
Figure 5: Types of apps used regularly, July 2016
Three in four mobile users need less than seven types of apps
Figure 6: Repertoire of types of apps used regularly, July 2016
Word of mouth is the most effective in driving downloads
Figure 7: Download influences, July 2016
Disengagement is by far the most important reason to delete apps
Figure 8: Reasons to delete apps, July 2016
Less than a third of mobile users spend money on apps
Figure 9: Ways in which consumers have spent money on apps in the past three months, July 2016
Subscriptions boost willingness to spend
Figure 10: Amount consumers have spent on apps in the past three months, by spend type, July 2016
App convergence further challenges user retention
Figure 11: Attitudes towards mobile apps (1/3), July 2016
Privacy concerns still outweigh benefits of location tracking
Figure 12: Attitudes towards mobile apps (2/3), July 2016
Monetisation opportunities in the travel market
Figure 13: Attitudes towards mobile apps (3/3), July 2016
What we think
ISSUES AND INSIGHTS
Fostering monetisation
The facts
The implications
Adapting to the maturity of the UK’s app market
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Market maturity slows revenue growth
App monetisation is largely driven by in-app purchases
iOS dominates worldwide revenues despite Google Play’s higher downloads
Shifting digital habits
Deep linking offers new opportunities for discovery and engagement
Console gaming meets mobile
The sticker economy is coming into the mainstream
MARKET SIZE, SEGMENTATION AND SHARE
Market maturity slows revenue growth
Figure 14: Value of mobile device apps sales and in-app purchases from the iOS App Store and the Google Play Store in the UK, 2012-16 (est.)
App monetisation largely driven by in-app purchases
Figure 15: UK iOS App Store and Google Play Store app revenue, by revenue model, July 2016
Subscriptions take monetisation beyond gaming
Figure 16: Top apps, by revenue on the UK iOS App Store, July 2016
Figure 17: Top apps, by revenue on the UK Google Play Store, July 2016
iOS dominates worldwide revenues despite Google Play’s higher downloads
Figure 18: App store revenue split for iOS App Store and Google Play Store, by country, July 2016
MARKET DRIVERS
Shifting digital habits
Figure 19: Personal ownership of mobile devices, January 2012-July 2016
Figure 20: Device consumers would miss the most, October 2015
Deep linking offers new opportunities for discovery and engagement
Console gaming meets mobile
The sticker economy is coming into the mainstream
KEY PLAYERS – WHAT YOU NEED TO KNOW
Apps become more prominent in Google search results
Apple launches search ads in the US
Google and Apple look to reinforce their positioning in the messaging world
Apple partners with Deloitte to target enterprise segment
Windows 10 enables cross-device app development
‘Computers’ apps the most advertised
TV is the preferred advertising channel
LAUNCH ACTIVITY AND INNOVATION
Apps become more prominent in Google search results
Apple launches search ads in the US
Google and Apple look to reinforce their positioning in the messaging world
Apple partners with Deloitte to target enterprise segment
Windows 10 enables cross-device app development
Vodafone launches operator billing
Google Play introduces family sharing
ADVERTISING AND MARKETING ACTIVITY
‘Computers’ apps the most advertised
Figure 21: Recorded above-the-line, online display and direct mail total advertising expenditure on mobile apps, by app category, 2015
TV is the preferred advertising channel
Figure 22: Recorded above-the-line, online display and direct mail total advertising expenditure on mobile apps, by media type, 2015
Methodology and coverage
THE CONSUMER – WHAT YOU NEED TO KNOW
Android is the platform with the most reach
Social media and messaging apps the most popular
Word of mouth the most effective in driving downloads
Disengagement by far the most important reason to delete apps
Less than a third of mobile users spend money on apps
App convergence further challenges user retention
OPERATING SYSTEM ON MOBILE DEVICES
Android is the platform with the most reach
Figure 23: Operating system on any mobile devices owned (either smartphone or tablet), July 2016
Figure 24: Operating system on any mobile devices owned (either smartphone or tablet), by age, July 2016
Device-specific dynamics impact platforms’ reach
Figure 25: Operating system, by device, July 2016
Reach does not necessarily lead to usage and profitability
Figure 26: Operating system on any mobile devices owned (either smartphone or tablet), by repertoire of types of apps used regularly, July 2016
Figure 27: Ways in which consumers have spent money on apps in the past three months, by operating system on any mobile devices owned (either smartphone or tablet), July 2016
TYPES OF APPS USED REGULARLY
Social media and messaging apps the most popular
Figure 28: Types of apps used regularly, July 2016
Figure 29: Top apps, by monthly active users in the UK, 2015
The rise of mobile gaming
Figure 30: Devices used to play casual internet games in the past three months, June 2014 and June 2016
Figure 31: Gaming frequency on the devices owned/in the household, July 2015
Demographic reach varies by app type
Three in four mobile users need less than seven types of apps
Figure 32: Repertoire of types of apps used regularly, July 2016
Three degrees of relevance of mobile apps
Figure 33: Types of apps used regularly, by repertoire of types of apps used regularly, July 2016
DRIVERS OF DOWNLOADS
Word of mouth the most effective in driving downloads
Figure 34: Download influences, July 2016
iOS users the most likely to be influenced
Figure 35: Download influences, by operating system on any mobile devices owned (either smartphone or tablet), July 2016
Ads more effective in driving spend
Figure 36: Download influences, by amount spent on apps in the past three months, July 2016
REASONS TO DELETE
Disengagement by far the most important reason to delete apps
Figure 37: Reasons to delete apps, July 2016
The impact of storage constraints
SPEND ON APPS
Less than a third of mobile users spend money on apps
Figure 38: Ways in which consumers have spent money on apps in the past three months, July 2016
Subscriptions boost willingness to spend
Figure 39: Amount consumers have spent on apps in the past three months, by spend type, July 2016
Consumer groups driving spend on apps
Figure 40: Average amount consumers have spent on apps in the past three months, by age, July 2016
ATTITUDES TOWARDS MOBILE APPS
App convergence further challenges user retention
Figure 41: Attitudes towards mobile apps (1/3), July 2016
Privacy concerns still outweigh perceived benefits of location tracking
Figure 42: Attitudes towards mobile apps (2/3), July 2016
Monetisation opportunities in the travel market
Figure 43: Attitudes towards mobile apps (3/3), July 2016
Figure 44: Screenshots of the Google Trips app, September 2016
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Data sources
Abbreviations